1951-05-23

Mr. L. A. Mutch (Winnipeg South):: 
Mr. Speaker:: In reply to the hon. member for Winnipeg South (Mr. Mutch) may I say that the question of parking has been receiving the attention of the Sergeant-at-Arms for some time. As hon. members know, there is only a limited space in the neighbourhood of the parliament buildings which can be made available for parking motorcars. The Sergeant-at-Arms has endeavoured to ascertain how many members have motorcars and wish to park them on parliament hill. There are officials of this house, for whom space has been reserved, who come here regularly, often they arrive earlier than members of parliament, and they are required to stay here very late at night. The question of parking on parliament hill is a problem, just as it is in every city. I can assure hon. members that the Sergeant-at-Arms is doing his best to provide parking facilities for all members. In view of what has been said today, I am satisfied that he will again go into this question.


Mr. C. E. Johnston (Bow River):: Mr. Speaker, on a question of privilege, I too have a complaint with regard to parking on parliament hill. As yet, I have not received one of the tickets mentioned by the hon. member who spoke a moment ago (Mr. Mutch); but I expect that there will be one on my car when I go out in a few minutes, because, if I am not mistaken, I parked in a space reserved for cabinet ministers. I did so because although I drove around the buildings three times, trying to find a place to park, I was unable to find one. Then when I went back to inquire from the mounted

Inquiries of the Ministry policeman where I could hang the car, perhaps somewhere from a tree, he was not even around. I was therefore compelled to park my car wherever I could find an available space.


Mr. Cruickshank:: Why not take it over to the Senate side?


Charles Edward Johnston: May I point out to you, Mr. Speaker, that one of the difficulties we encounter with respect to parking might be overcome if a little bit more caution were practised by some of the hon. members when they park their cars. On several occasions when I have come to park my car I have found that other members have left their cars parked with the front end over one line and the back end over the other, thereby taking up two spaces instead of one.


George Alexander Cruickshank: They should learn to drive.


Charles Edward Johnston: I may also say that when I was trying to find a parking space a little while ago, there were two other members who were in exactly the same position. It is absurd that when we come to the hill to park our cars, in order to be here to attend to the business of the house-because I am always here and am never late-there is no space available. I want to register my protest along with that of the hon. member for Winnipeg South.



INQUIRY AS TO SETTING UP OP COMMITTEE OF INVESTIGATION

Hon. Stuart S. Garson (Minister of Justice):: Yesterday the hon. member for Kamloops (Mr. Fulton) asked me a rather long question, and in reference to it I said that he had given me no notice of it; whereupon he stated, as reported at page 3265 of Hansard:
I wish merely to point out, with reference to the statement of the minister, that I phoned his office yesterday and advised him of the subject matter of the inquiry which I was to make.
I am sure that my hon. friend will be the first to admit that he did not telephone me at all on Monday. I wish simply to make that point.


Mr. Fulion:: On the question raised by the Minister of Justice, I want to agree immediately that I did not contact the minister personally, but I did advise his office. My intention was to ask today, on a question of privilege, that Hansard be corrected so that the statement would read "to advise him" instead of "and advised him"-


Some hon. Members:: Oh, oh.
(Mr. Johnston.]


Edmund Davie Fulton: -which is what I actually said yesterday when the matter was being discussed.
[Later] :
On the orders of the day:


Stuart Sinclair Garson: Mr. Speaker, yesterday the hon. member for Kamloops asked me certain questions, of which I said I would take notice. I said I would get in touch with him in order to get the exact text. This I have done.
This morning the hon. member supplied me with information in which he pointed out that he had asked the following question:
The issue of the Montreal Standard on Monday contains the second instalment of an article "The case of Montreal missing gamblers." In this article it is alleged that Mrs. Balazo, the wife of one of the missing men, appealed to the Minister of Justice and the R.C.M.P. for assistance in tracing her husband and was promised an investigation would be made. That was in February. I would like to ask two questions:
(1)	If the R.C.M.P. made an investigation into the case, and if so, with what result?
(2)	In view of the allegations of the importation of American gunmen and of the existence of organized crime in Montreal and elsewhere, including counterfeiting and gambling, has the government given consideration to conducting an inquiry into the organized criminal activities in Canada along the lines of the inquiry which has produced such startling results in the U.S.A.?
It will be remembered that I answered the second of these two questions yesterday.
The answer to the first is that the Royal Canadian Mounted Police were requested by the Montreal city police to publish particulars of the missing persons, Alex and Frank Balazo, in the R.C.M.P. Gazette, a publication which is distributed to all police forces in Canada. Stop notices were also placed in the R.C.M.P. fingerprint files in the event that fingerprint impressions of either of these men were later received.
Mrs. Alex Balazo wrote to the Minister of Justice on January 30, 1951, and asked if any assistance could be given in locating her husband. The letter was passed to the commissioner of the mounted police and was acknowledged by that official. At that time the item on these missing men had already been published in the R.C.M.P. Gazette, but a special notice was then sent to the large R.C.M.P. divisions instructing that investigators in the major cities be alerted in respect to this case.
I believe I should say also that the administration of justice, including the enforcement of the Criminal Code of Canada, by section 92(14) of the British North America Act is exclusively assigned to the provincial authorities, which create provincial and municipal police forces for these purposes.

The Royal Canadian Mounted Police provide certain national services which are available to all provincial and municipal forces. These include the police Gazette, the fingerprint bureau, and the firearms registration section. These services are used regularly by other provincial and municipal forces, and it will be noted that they were so used in the present case. Additionally, the R.C.M.P. are always ready to assist when requested by municipal and provincial forces; but if not requested they do not interfere in matters beyond their jurisdiction. Frequently the R.C.M.P. are asked by private citizens to investigate cases which are the primary responsibility of another law enforcement body, and in such instances they simply refer the inquiry to the proper police authority. In the present case, the R.C.M.P. took no action in or about Montreal, but merely used1 their machinery to circularize other police forces and their own personnel.


Edmund Davie Fulton: May I ask the minister whether the R.C.M.P. do not have a special responsibility with respect to counterfeiting, which perhaps would transcend the other jurisdictional boundaries he has described?


Stuart Sinclair Garson: That is right. There are one or two exceptional cases of that kind, where the federal government is involved. There is counterfeiting, and then the same would apply where some major robbery took place in a federal department building, or something of that kind.



RULES RESPECTING STRANGERS IN THE GALLERY AND SUBJECTS OF QUESTIONS OF PRIVILEGE

[Stage Direction]
On the order for motions:
Mr. M. J. Coldwell (Roselown-Biggar):: rise to draw your attention, Mr. Speaker, to a matter which I believe requires some consideration on your part. I might add that I have hesitated to direct attention at the time to what I believed to be violations of the procedure and the rules of the house because of the risk of being misunderstood! by the member or members involved.
Under standing order 13 hon. members may draw attention to strangers in the gallery for the purpose of requesting their exclusion; but I believe it is a violation of the rules to draw attention to the presence in the gallery of students or persons other than a special or distinguished representative of a friendly country. In the same connection, the practice has grown up recently of hon. members rising on matters of privilege which are clearly not permitted by the rules. I refer specifically to recording the distinctions conferred
House of Commons
on persons, places or constituencies by the winning of sporting and other events or awards.
Some hon. members may be misunderstood when, observing the rules of the house, they refrain from recording the winning of sporting or other events by their constituents, or fail to refer to the presence in the gallery of groups or persons in whom they are interested.
I hope, Mr. Speaker, that both Your Honour and hon. members of the house will realize that in raising this question I am doing so in order that you may give some consideration to the problem and perhaps give some guidance thereon to hon. members so that all may be governed accordingly.


Some hon. Members:: Hear, hear.


Mr. Speaker:: I am grateful to the hon. member for Rosetown-Biggar (Mr. Coldwell) for bringing this matter to my attention. I have noticed this breach, which has become almost a practice in the house. I will give consideration to the remarks which the hon. member has made and which, I understand, meet with the approval of the members of the house, and will make a statement with regard to the matter in the near future.



INCREASE OF PRICES IN CAFETERIA


Mr. J. H. Rooney (Si. Paul's):: Mr. Speaker, on a matter of privilege, I should like to ask a question. Within the last three days- yesterday or the day before, I believe-there was an increase in prices in the cafeteria. I am not complaining of the increase in prices in the restaurant. I was wondering if the committee which has to do with the matter could not see their way clear to making no increase in the price of coffee or tea. If this committee would sit down and consider the matter, they might decide to leave coffee and tea at the former price. To my mind, it is a matter that affects only the workers here-the page boys and many others-who have to do without certain things; and this increase means a good deal to them.	,
I speak of this because during the depression, through my clubs in Toronto, we distributed thousands of cups of tea and coffee, and perhaps the odd biscuit. I know what it means to people when they have to deprive themselves of a cup of coffee because it is priced at ten cents instead of five. We should be able to avoid that by raising the prices on some other things. Possibly this committee can sit down and correct their

Divorce Jurisdiction
budget. If they cannot correct it themselves they might call in the Minister of Finance for some advice.



STANDING ORDERS

[Stage Direction]
Second report of standing committee on standing orders.-Mr. MacLean (Cape Breton North and Victoria).


Mr. Alistair Stewart (Winnipeg North) moved: for leave to introduce Bill No. 333, to declare the meat packing industry works for the general advantage of Canada.


Some hon. Members:: Explain.


Alistair McLeod Stewart: The purpose of this bill is to make that part of the meat packing industry which carries on operations in two or more provinces subject to paragraph (g) of section 53 of the Industrial Relations and Disputes Investigation Act. In matters of collective bargaining the industry will then be able to negotiate on a national basis and the government of Canada will have the authority to deal with disputes in an industry whose smooth functioning is essential to the national economy.
Motion agreed to and bill read the first time.



DIVORCE JURISDICTION ACT


Mr. Stanley Knowles (Winnipeg North Centre) moved: for leave to introduce Bill No. 334, to provide for the jurisdiction of the Exchequer Court of Canada in matters of divorce.


Some hon. Members:: Explain.


Stanley Howard Knowles: The purpose of this bill is to free parliament from the necessity of processing individual divorce cases, a practice we all dislike, and at the same time to put an end to any agitation for the establishing of divorce courts in provinces where they are not wanted.
This bill does not establish divorce courts in Quebec or Newfoundland. It does not make available to persons residing in those provinces any facility not now available to them. It merely transfers the hearing of Quebec and Newfoundland divorce petitions from parliament to the Exchequer Court of Canada.
This is the same bill I have introduced on two previous occasions, except that it has
IMr. Rooney.)
one additional clause which provides categorically that the exchequer court shall exercise its right to hear divorce cases only at the city of Ottawa. I have added this clause to make that point crystal clear.
Motion agreed to and bill read the first time.



PRIVATE BILLS


[Stage Direction]
Bill No. 323, for the relief of Jane Stirling Stephens.-Mr. Winkler.
Bill No. 324, for the relief of Mavis Elizabeth Thomas Wrathall.-Mr. Winkler.
Bill No. 325, for the relief of Ida Courland Rubin Flesch.-Mr. Winkler.
Bill No. 326, for the relief of Yvonne Winifred Kathleen Walker Andrews.-Mr. Winkler.
Bill No. 327, for the relief of Elizabeth Cochrane Aitchison Lalonde.-Mr. Winkler.
Bill No. 328, for the relief of Violet Taylor Carey.-Mr. Winkler.
Bill No. 329, for the relief of Julia Saykaly Hajaly.-Mr. Winkler.
Bill No. 330, for the relief of Doris Auclair Gingras.-Mr. Winkler.
Bill No. 331, for the relief of Georges Paquin.-Mr. Winkler.
Bill No. 332, for the relief of Marion Agnes Kelsch Cleghorn.-Mr. Winkler.


CANADIAN ARMED FORCES


Mr. Thatcher:: 1.	During the past fiscal year, how many recruiting offices were there in Canada for (a) the air force; (b) the navy; (c) the army?
2.	What was the cost of maintaining these offices for each service?
3.	As at March 31, 1951, what active service personnel was engaged in the operation of recruiting stations in each service?
4.	Has the Department of National Defence considered the amalgamation of recruiting offices in each city?
5.	If no amalgamation is to be proceeded with, what are the reasons?


Mr. Blanchette:: 1 and 2.	(a) 19. Cost of maintenance for
fiscal year 1950-51, borne by the Department of Public Works, was $64,720. (b) 1. Cost of maintenance for fiscal year 1950-51, borne by the Department of Public Works, was $360.	(c) Nil.
3.	Navy: On part time basis, two officers and 25 men; on full time basis with mobile unit, four officers and two men; army:. On part time basis, 60 officers and 162 men; air force: 61 officers and 62 men.
4.	Yes.
5.	The only place where there is duplication of separate recruiting establishments is

at Victoria, B.C., where the R.C.N. and R.C.A.F. both have offices. The cost of maintaining the R.C.N. office at Victoria was $360 in 1950-51, as noted above. It was considered that the advantage of having there a separate office more than outweighed this additional cost. It should be noted that in addition to the 20 separate offices referred to in the answer to questions 1 and 2 above, recruiting was also carried on by the R.C.N. in the 21 naval reserve divisions, in the Canadian army in active and reserve units, command, area and other headquarters, etc., and in the R.C.A.F. at command headquarters and regular and auxiliary establishments. All the accommodation is fully used. In any event it would not be considered desirable to endeavour to recruit personnel for the army or air force at naval reserve divisions or vice versa, for the following reasons among others:
(a)	under the present arrangements the three services for the most part employ personnel for recruiting who are primarily engaged in other duties and utilize accommodation which exists for other purposes. During period of decreased numbers of applications recruiting staff carry on other duties.
(b)	amalgamation of recruiting offices would require the setting up in each city of additional office space and personnel from each of the three services would have to be provided on a full time basis.
(c)	in order to stimulate competition, it is considered more advantageous to maintain a clear-cut distinction between the services with the appropriate service atmosphere for recruiting services rather than impersonal recruiting offices staffed on a tri-service basis.
(d)	experience in both the United Kingdom and the United States when these countries were on an entirely voluntary basis supports the present arrangements for separate facilities.



RESEARCH ENTERPRISES

Mr. Noseworthy:: 1.	Did the government dispose qf Research Enterprises after the war? If so. how was it disposed of, and to whom?
2.	If sold, what price was realized on the sale of (a) land and buildings; (b) machinery and other equipment?
3.	What was the original cost to the government of (a) land and buildings; (b) machinery and other equipment?
4.	What is the estimated cost of (a) land and buildings; (b) machinery and other equipment required in the present expansion program for Research Enterprises?


Mr. Mcllrailh:: 1.	Yes. A part of the plant consisting of lands and buildings was sold by War Assets
Questions
Corporation to the following industrial purchasers:	Corning Glass Works, Toronto,
Ontario; Rogers Majestic Limited, Toronto, Ontario; Reo Motor Company of Canada, Toronto, Ontario; Parkhurst Realty Company Ltd., Toronto, Ontario; J. R. Thompson, Toronto, Ontario.
Part of the land comprising the extension of Vanderhoof avenue was granted to the town of Leaside as a public thoroughfare.
The balance of the original property known as Research Enterprises Limited was taken over by the instrument and radar division of Canadian Arsenals Limited, a crown corporation.
2.	(a) Sales for industrial use of lands and
buildings were as follows:
Corning Glass Works	 $150,000.00
Rogers Majestic Limited	 628,214.55
Reo Motor Company of Canada	130,740.00
Parkhurst Realty Company Ltd.	175,000.00
J. R. Thompson	 24,400.00

(b) Part of the machinery and equipment was retained by Canadian Arsenals Limited. It is impossible to compute the selling price of the balance, as it was found necessary to move such machinery and equipment to War Assets warehouses, from which points disposal was made. Identity of such equipment as to its source was lost; consequently no sales figure is obtainable.
3.	The original cost to the government of the entire plant was as follows: (a) lands and buildings, $3,660,174.49; (b) machinery and equipment, $5,400,053.70.
4.	The crown company known as Research Enterprises Limited was wound up in October, 1946, and its charter surrendered. There is, therefore, no present expansion program for Research Enterprises as such, since the nucleus that was retained is now part of Canadian Arsenals Limited. (See answer to No. 1.)



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. Lennard:: 1.	Has the government placed orders with Levy Auto Parts Company Limited, 1400 Weston road, Toronto, Ontario, from January 1, 1951, to May 1, 1951?
2.	If so, what were these orders for, and what was the value?



PENSIONS


Mr. Higgins:: 1. How many war pensioners are in receipt of pensions for disability incurred as a result of having contracted tuberculosis?

Inquiries of the Ministry
2.	What is the total amount of such payment?
3.	How many war veterans are in sanatoria suffering from tuberculosis contracted while in the armed forces?
4.	What is the estimated annual cost of caring for such war veterans?




Mr. Black (Cumberland):: 1.	As at January 1, 1950, how many veterans were being paid pensions of 50 per cent or more, due to coronary thrombosis and sclerosis, incurred during service?
2.	During 1950, how many of the above had their classification altered from incurred during service to aggravated during service, and as a result suffered a decrease in pension?



VETERANS INSURANCE ACT


Hon. Hugues Lapointe (Minister of Veterans Affairs) moved: that the house go into committee at the next sitting to consider the following resolution:
That it is expedient to introduce a measure to amend the Veterans Insurance Act to extend the scope of the act and the period during which a contract of insurance may be entered into; to increase the amount payable at time of death and, in certain cases, to permit the estate of the insured to receive the full amount payable under the policy contract; to provide for the insertion in the policy contract of a war clause in certain cases; and generally to improve the administration of the act.
He said: His Excellency the Governor General, having been made acquainted with the subject matter of this resolution, recommends it to the consideration of the house.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the orders of the day:
Mrs. Ellen L. Fairclough (Hamilion West):: I should like to address a question to the Postmaster General. Will the Postmaster General say when an announcement may be made as to the form of compensation to be given to postal carriers for overtime work in the transition period of instituting the new delivery service?


Hon. Edouard Rinfret (Postmaster General):: I will take the question as notice and give an answer to the hon. member as soon as possible.



DEFENCE PRODUCTION


[Stage Direction]
On the orders of the day:
Mr. Solon E. Low (Peace River):: I should
like to direct a question to the Minister of
	'
Defence Production. What plans, if any, has the minister for speeding up defence production through utilization, within the province of Alberta, of the natural gas, oil, coal and other very important materials that are available in quantities in that province?


Right Hon. C. D. Howe (Minister of Defence Production):: The department for
which I am responsible is doing everything possible to speed up the development of the natural resources of Alberta for the defence effort. The largest drilling program for gas and oil that has ever 'been known in that province is under way. To aid that program the federal government is undertaking to provide steel pipe, which is in very short supply, for stockpiling at Calgary and Edmonton in the government stockpile, and it will be issued when required to keep pace with the development. There are three or four refinery projects in Alberta, running into some $20 million, and again the government is undertaking to supply the steel and other scarce materials required to keep these programs under way.
There is a chemical development, using natural gas and salt found in the province, for the production of caustic and similar products. The government is supporting that program with materials. There is, as my hon. friend may or may not know, a $65 million petro-chemical project being started there-


Some hon. Members:: Wheat.


Clarence Decatur Howe: No, petro. Petro means
petroleum; chemical means chemical made from petroleum, and the government intends to support that program through the supply of essential materials and steel. When we speak of the petro-chemical industry, 1 might remind my hon. friend that this government pioneered the chemical industry in Alberta when it built the Alberta nitrogen plant, which is still the cheapest producer of ammonia of any plant that I know of in the world.
I have touched only the fringe of development in Alberta, and the government assistance thereto; but I will say that we are giving industry in Alberta exactly the same support that we are giving industry in every other province. The only difference is that there seems to be a little more initiative in Alberta than in some other provinces.



REQUEST FOR CHEMICAL INDUSTRY BASED ON NOVA SCOTIA SALT DEPOSITS

[Stage Direction]
On the orders of the day:
Mr. P. C. Black (Cumberland):: Mr. Speaker, I should like to ask the Minister of Defence Production if any steps have been

taken to develop a chemical industry based on the tremendous natural resource of salt, or sodium chloride, in Nova Scotia? There are beds extending for thousands of feet in that area.


Clarence Decatur Howe: Consideration is being
given to the problem. However the project has not advanced to the point where any announcement can be made at the present time. Serious consideration is being given to it.	.



CRIMINAL CODE


[Stage Direction]
On the orders of the day:
Mr. J. G. Diefenbaker (Lake Centre):: Mr. Speaker, I should like to ask a question of the Minister of Justice, arising out of this week's issue of The Ensign. Does the minister intend to bring in an amendment to the Criminal Code at this session that will lead to the deportation of Fred Rose when he comes out of the penitentiary, because of his conviction for sedition?


Stuart Sinclair Garson: Mr. Speaker, the subject matter to which the hon. member has referred is one which would be connected with the annual Criminal Code amendment bill which is now being considered by the government. Any decision in the matter will be announced when the bill is brought into the house.



CANADA GRAIN ACT


[Stage Direction]
On the orders of the day:
Mr. P. E. Wright (Melfort):: Mr. Speaker, I should like to ask a question of the Minister of Trade and Commerce. Will there be any amendment at this session to the Canada Grain Act?


Clarence Decatur Howe: There will be no amendment at this session.



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
On the orders of the diay:
Hon. Lionel Chevrier (Minister of Transport):: Mr. Speaker, yesterday the hon.
member for Selkirk (Mr. Bryce) asked whether it was so that the Canadian National Railways would not guarantee jobs or seniority to those enlisting either in the air force or the navy.
Inquiries of the Ministry
I have consulted the management of the Canadian National Railways, and the answer I receive is that if an employee of that organization joins a special force for a special purpose and for a specific length of time in a period of emergency, and is planning to return to his employment in the railway, he is protected as to his job, his pension and his seniority. If however he joins the permanent army, the air force or the navy he is considered to have separated himself from his employment and to have embarked upon a new career, and actually to have abandoned his position with the railway. In that case he is not entitled to the same privileges as in the first case.



STRAIT OF CANSO BRIDGE


[Stage Direction]
On the orders of the day:
Percy Chapman Black: Mr. Speaker, has the Minister of Transport any further report to make on the causeway or bridge over the strait of Canso?


Lionel Chevrier: I have no further report to make. I have already indicated that I expected to get a report from the reconvened board of engineers on the subject matter, and I said that as soon as I had it I would indicate it to the house, either during the consideration of my estimates or at some other opportune moment.



FOOD SITUATION


[Stage Direction]
On the orders of the day:
Mr. Gordon Graydon (Peel):: Mr. Speaker, I should like to ask a question of the Prime Minister, arising from the answer he made to a question asked last week about the policy of Canada with respect to emergency famine relief in India. Will the government soon be in a position to announce a policy in that regard?
Right Hon. L. S. St. Laurent (Prime
Minister): I will not overlook the promise I made to the house to announce any decision the government arrives at just as soon as it has arrived at that decision.

The house resumed, from Tuesday, May 22, consideration of the motion of Mr. Fournier (Hull) for committee of supply.

Government Financial Policy



GOVERNMENT FINANCIAL POLICY


Mr. J. H. Blackmore (Lethbridge):: Mr. Speaker, last night at 10.45 I rose to voice a grievance, namely, that the government of Canada has mismanaged the financial affairs of Canada and, more specifically, that the Department of Finance is failing to keep enough money circulating in appropriate hands to ensure the health of the body economic of Canada. To show that Canada's Department of Finance could better manage the financial affairs of Canada, I proposed to discuss two great monetary experiences of the last 140 years. The story of the first of these, the Guernsey island markethouse experiment, I summarized. May we turn now to consider the much more extensive experiment of the greenbacks of Lincoln's time in America?
The greenback was a unit of United States government created and issued currency, a debt-free dollar bill. Its use began in 1862 with the issue of $150 million of greenbacks to be spent into circulation debt-free. By 1863, $450 million of greenbacks had been issued and so spent. In June, 1864, there were outstanding $431 million of greenbacks. This money had all been spent into circulation for government purposes. A greenback was therefore a debt-free dollar when originally issued. The greenback was not supported or backed by specie. The greenback was legal tender for all debts except the payment of customs duties and interest on the public debt. For verification of these particulars see Sir Norman Angell's "The Story of Money" at page 293.
There were circumstances that would seem to make dangerous the use of the greenback by the United States at that time. When the new administration of Lincoln took office there were a number of serious financial disabilities, with which I shall deal briefly later on. The nation was engaged in a dangerous civil war, the outcome of which was by no means predictable. This fact would naturally result in public apprehension and pressure for increasing prices, inflation in our modem usage of the word.
Production in the United States was disrupted seriously because of at least two obvious factors. First, there was the relatively enormous number of men taken out of production to don uniforms and to engage in war industry, not to mention the horsepower taken out of production. Second, there was the considerable disorganization of normal commercial relations between the northern and the southern groups of states. Manifestly every degree of deterioration in the supply position of the northern states made goods

and services scarcer and resulted in rising prices, now called inflation, and constituting the only real inflation.
A whole nation accustomed to specie as the guarantor of the soundness of its money found itself suddenly absolutely upon a paper basis, with even its banks refusing, and being unable, to redeem either their own paper, or government paper, with any kind of specie.
The greenback was incessantly under attack from the money powers, as were the assignats, mentioned in my quotation from Robert McNair Wilson's "Monarchy or Money Power," to which I referred the other day, as reported on page 2525 of Hansard. To show the insidious part played by the United States bankers in opposing the greenbacks I should like to quote from the proceedings of our Canadian banking and commerce committee of 1934, at page 664. I quote from a statement by G. G. McGeer, the famous monetary authority, who said:
The national bankers' circular was issued by James Buell, the representative of the bankers' association in the United States, and a copy was sent to each banker in the States and it read as follows: "Dear Sir:
It is advisable to do all in your power to sustain such daily and weekly newspapers, especially the agricultural and religious press, as will oppose the issuing of greenback paper money, and that you also withhold patronage or favours from all who will not oppose the government issue of money. Let the government issue the coin, and the banks issue the paper money of the country; for then we can better protect each other. To repeal the law creating national banks, or to restore to circulation the government issue of money, will be to provide the people with money and will, therefore, seriously affect your individual profit as bankers and lenders. See your member of congress at once, and engage him to support our interest that we may control legislation."


Mr. Irvine:: What is that number?
The Witness:	The national bankers' circular.
This is part of the Congressional Record of a later date. It is published in several books; one. "The Management of Credit," by T. Cushing Daniel, is a well-known document.
A statement such as that may help hon. members to understand why they have heard only disparaging remarks about the greenbacks.
Then there was no form of price control in use by the United States federal government. The greenback was not subjected to intelligent control as debt-free money now could be, either as to the amount created, or as to the manner of spending it into circulation. There was besides no rationing or over-all control or direction of material supply.
What were some of the phenomena associated with the use of greenbacks? Opponents of debt-free money, state-created money, affirm that the greenbacks are unsound; that they caused enormous price

increases from an index of 100 in 1860 to 217 in 1865; that they hurt the wage earners whose wages during the same period rose only from 100 to 143; that those on fixed incomes, such as schoolteachers, were severely hurt; that soldiers were severely hurt; that the civil war cost the people of the northern states $389 million extra because they used the greenbacks.
But any kind of money, $450 million of it, spent by the government into circulation in the northern states in so short a period would have produced exactly the same rises in price. All we have to do is remember our own experiences in the recent war and in the first war. Specie borrowed directly from the United States banks would have done it. Currency borrowed from the United States banks or credit borrowed from the United States banks would have done it. Solid gold in the form of five dollar gold pieces stamped in the United States mint and spent by the government would have caused exactly the same price rise and created the same other effects, other things being equal. The rise of prices, therefore, could not with justice be blamed upon the greenbacks.
Fundamentally the price rise accompanying greenbacks was a result of having too few goods to buy with the greenbacks and all the other different kinds of money already in circulation. May I repeat that the price rise had and could have little or nothing to do with the kind of money the government used to spend, whether it was debt-free paper, debt or borrowed bank paper, paper backed by specie or gold in any percentage, coins of either silver or gold, either minted by the government and spent, or minted and borrowed from the banks and spent. A relative shortage of goods was the only monetary cause of the price increase. Of course, where there was no price control or rationing, price rises could have been the result of profiteering.
But there were several other contributing factors besides the spending into circulation of $450 million, no matter what kind of money those millions might be. Many weaknesses existed in the general financial situation prevailing at the beginning of the administration of Lincoln.
When the new administration of Lincoln took office, I quote: "it found the national finances in a very bad way". "The treasury was practically empty," "customs receipts had fallen off considerably," "the public credit was shaken," "the administration did not feel itself able to impose severe taxation on the people," and "three out of every four dollars the government spent was borrowed money." See "The Story of Money", pages 292 and 293.
Government Financial Policy
Soon after war broke out the government borrowed $150 million from the banks, demanding it all in specie, thereby weakening their specie position enough to force the banks off specie ultimately, and on to a strictly paper basis. Even at that the government had so little specie in its subtreasury that the government had to go upon an inconvertible paper basis.
Against this disquieting background, the government, sorely in need of funds, began issuing greenbacks. See Sir Norman Angell's "The Story of Money", pages 292 and 293. To recapitulate the adverse factors affecting the greenbacks: A dangerous civil war was unpredictable as to its outcome, thus engendering lack of confidence. Production was very seriously disrupted in the whole nation. The nation was accustomed to specie and so naturally was anxious about being only on paper. The greenback was constantly under attack by bankers and financiers. On the other hand, as I have already indicated, there was no form of price control. The greenback was not "subjected to intelligent control" as to amount created, or as to manner spent into circulation. There was no rationing of either retail goods or of raw materials for manufacturing. Finally, from any standpoint either of orthodox or of nonorthodox monetary thinking, the greenback was at a real disadvantage on the United States money market because of the fact that the government would not accept it in payment of customs duties and interest on the public debt.
Any just and accurate appraisal of the greenback experience must be made bearing all of these considerations strictly in mind; but when men talk of the greenback I notice they never bear any of these considerations in mind. They becloud their thinking.
What is the importance to us and our generation of state-created debt-free money? With it men can make financially possible what in a community is physically possible. This is a fact of epoch-making significance if men can only come to realize and appreciate it. If members of this house could come to appreciate that fact, it would mean the possibility of an epoch-making event in Canada, greatly to the benefit of this nation.
Let us now review the facts about Guernsey island. In Guernsey island the government in 1815 created and spent three thousand one pound notes with no gold or other backing except the going-concern-goods-and-services-producing-and-consuming-activi-ties of the island. These notes the government spent into circulation to build a markethouse from its resources, material and human, with the understanding that

Government Financial Policy those notes would be redeemed with revenues derived from renting the markethouse. Records indicate no inconvenient rise in prices. The state notes were therefore unquestionably sound money. The Guernsey islanders, therefore, built the markethouse at no financial cost whatever to themselves.
Did they get something for nothing? No. They merely set to work resources, human and material, that were not in actual use, and would have remained unused, except for the creation and spending of the state pounds. Before the government created and spent the three thousand state-note pounds, many of its workers were idle or partly idle. The stone in the quarry was idle. The tools were idle. Considerable food, clothing and shelter were unbought in the markets, and were therefore more or less idle or unused. Resources like soil and fisheries, ready to produce more food, etc., were partly or wholly idle. In other words it was physically possible for the islanders to build that markethouse. The physical potentialities of producing the necessary goods and services to build the markethouse were available to the islanders.
But they could not get the money essential to set those potentialities into action, to make their existing goods and services begin to be built into the markethouse, and then to turn such of their resources as fertility of soil, hay, milk cows, fish in the sea, fishing equipment, stone in the quarry, into replenishing goods and services, and to cause those additional replenishing goods and services, thus brought into being, to be built into more and more of the markethouse, and so on, until the markethouse would be completed.
The state pound notes, when created and wisely spent, provided the money essential to turn Guernsey island's physical possibilities of building the markethouse into the physical realities that constituted the completed markethouse. Therefore the Guernsey islanders did not get their markethouse for nothing. They built into the markethouse the requisite amount of stone from their quarry, their food, clothing and shelter up to that time being left unused, their human energy and skill up to that time unused. To effect the building process, to motivate it, they employed their'state-created one pound notes. In other words, they made what was physically possible, as regards a markethouse, financially possible as regards that market-house, by the use of the debt-free pound notes that the government created and issued.
Their markethouse cost them a substantial amount of depreciation of the stone in their quarry, of the fertility of their soil, and of

Advisory Council on Manpower commonwealth peoples could have something resembling sterling, which was so successfully used by the British, to enable members of the commonwealth to exchange their goods freely to the benefit of the commonwealth and to the benefit of all mankind.
Debt-free money is the only means of scientific distribution. Hon. members will recall that men have solved the problem of production, but we must now solve the problem of distribution. Debt-free money is the key to the solution of the distribution problem. International plans such as the Colombo plan and others depend upon money. If you cannot or dare not obtain by taxing and borrowing enough money to finance Colombo plans, you cannot achieve your goal. With debt-free money and adequate production, men would be able to do all they desired to do with the Colombo plan.
Debt-free money, Mr. Speaker, used in conjunction with adequate production, constitutes the only possible means of preserving freedom, the only possible way of successfully combating communism.



NATIONAL ADVISORY COUNCIL ON MANPOWER

Mr. George H. Hees (Broadview):: Mr. Speaker, the grievance which I rise to voice is the use which, it appears to me, is being made of the advisory council on manpower. I hold in my hand two news releases, issued by the Department of Labour, reporting on the deliberations of the advisory council on manpower held last Friday and Saturday, May 18 and 19. After studying these releases, I believe it is only possible to come to one conclusion, and that is that the government is advising the advisory council, instead of the advisory council advising the government.
Now, these reports comprise eighteen typewritten pages, and are filled almost entirely with statements and recommendations made by the Minister of Trade and Commerce (Mr. Howe), the Minister of National Defence (Mr. Claxton), the Minister of Labour (Mr. Gregg), the deputy minister of labour and the economic adviser to the Department of Labour. In all of those eighteen pages there is only one statement made by a person other than a member of the government. It is contained in one short paragraph, and is a statement by Mr. Rhys Sale, president of the Ford Motor Company. There is no mention of anything having been said by any other member of the council who was not a member of the government.
I believe, Mr. Speaker, that we should re-examine the purpose for which this council was set up with such a fanfare three months ago. I should like to refer back to
[Mr. Blackmore.l



EXCISE TAX


Mr. Donald M. Fleming (Eglinlon):: Mr. Speaker, the grievance which I should like to raise this afternoon is one which, I regret to say, involves the good faith of the government in relation to assurances given on behalf of the government to the house and accepted by the house. The assurances in question were given to the house on November 30, 1949. The matter has to do particularly with a retroactive piece of legislation of the kind which parliament normally abhors passing and which it did not understand on that occasion that it was passing to have retroactive effect.
May I sketch briefly, sir, the background of this incident and the unhappy results which have flowed from it. On March 22, 1949, the Minister of Finance (Mr. Abbott) introduced his budget in the house. This was the famous pre-election budget. Among other resolutions introduced by the Minister of Finance was one to amend the Excise Tax Act in these words:
2. That the retail purchase tax be repealed and replaced by an excise tax of 10 per cent, payable by the manufacturer or importer, on all articles now subject to the retail purchase tax.
You will recall, Mr. Speaker, that prior to that time there had been a 25 per cent retail purchase tax applied to a wide variety of articles; and the purpose of this resolution, as stated by the Minister of Finance, was to eliminate that retail purchase tax and to substitute in its place a 10 per cent excise tax levied upon the manufacturer or importer. This would have involved amendments to sections 80 and 85 of the Excise Tax Act. But before it had an opportunity of dealing with that resolution, parliament was dissolved and a general election was held. In the meantime, however, even while these resolutions were being left suspended in the air-something that I hope will never again be allowed to happen during an election campaign-the government proceeded to apply these various changes contemplated by the resolution, although they had no legal authority whatsoever for doing so. There the matter remained, so far as parliament
Excise Tax
was concerned, until November 30, 1949, by which time litigation had been embarked upon by a number of litigants, arising out of the interpretation of this resolution introduced on March 22 and its doubtful meaning.
Just to fill out the history of the matter, I might add that on April 19 the government, acting under the resolution but without any authority from parliament, issued regulations purporting to define those to whom the new tax was to apply, listing instructions of a detailed nature with respect to the imposition and the collection of the tax.
May I now say a word, and I shall be brief about it, concerning the nature of the litigation which had been embarked upon in May of 1949. I shall not go into this matter in any great detail; there are technical questions involved. The essential point that I am making in giving this background information has to do with the way in which the rights of the litigants then before the courts of the land were treated by the government in this house and in subsequent actions.
As plaintiffs in the litigation there were certain importers of watches, watch movements and watch cases into Canada, these being in all cases finished articles. The practice was that the Canadian importer would purchase from the manufacturer abroad and would sell to the retail trade in Canada. These importers, of course, had not been previously personally affected by the 25 per cent tax because it had been levied at the retail level. When the resolution was introduced by the Minister of Finance in the terms in which I have quoted it, as you will recall, Mr. Speaker, it applied to a manufacturer or importer of goods as described in the resolution in the following terms:
-on all articles now subject to the retail purchase tax.
The litigation related to watches adapted in Canada to household or personal use. Briefly, the question in litigation was this. First of all, were these persons who imported the watches, watch movements and watch cases into Canada-so far as the putting of the watch movements into watch cases was concerned-manufacturers	or producers
within the terms of the resolution? If they were, did the new retail tax apply at the import level, payable at the time of import or at the time of sale by the importer to the retail trade?
There were important differences in the consequences that flowed from those two alternative interpretations; and one of the important consequences was that if the tax applied at the import level, these importers

Excise Tax
could not import apart from an import licence in the ordinary form of manufacturers' and importers' licence issued under the Excise Tax Act.
The interpretation put by the department on this resolution which, as I have said, was enforced for some months without any authority from parliament, was not an immediate interpretation. The resolution was not interpreted as applying to these importers for some weeks, but after the regulation dated April 19 was issued an attempt was made to apply the regulation to these particular firms, and they issued a writ in the Supreme Court of Ontario on May 7, 1949, seeking a declaration. I do not think that I need to dwell at length on the terms of the declaration they asked for, but briefly they asked for a declaration that they were not manufacturers or importers within the terms of the resolution, that the excise tax was not applicable at the time of import, and that they were entitled to import without the manufacturers' or sales licence.
The statement of claim in the action was delivered on May 23, two years ago today. The action was set down for trial on September 20, and was waiting trial, when the incident to which I refer in the House of Commons occurred on November 30, 1949. I do not dwell further on the issues in the litigation except to point out how entirely different were the two positions, the one being taken by the government, the other being taken by the litigants; the fact that these litigants seriously took their case to court, and that the action was well advanced and was simply awaiting trial when the question was raised in this house.
In the budget speech of the Minister of Finance at the second session of 1949, the Minister of Finance introduced new resolutions, and the resolution with respect to the Excise Tax Act amendment was similar in form to that introduced in the previous March. However, when the bill founded upon the resolution was introduced in this house questions were raised in committee of the whole following second reading. In the bill, which was Bill No. 175, which was before the house in the second session of 1949, amendments were proposed to sections 5 and 7 to amend sections 80 and 85 respectively of the act for the purpose of making the act clearly apply to such persons engaged in business in the way in which these particular firms were. There is no doubt that on the interpretation of the bill, it sought to amend the act for the purpose of making this tax applicable to these particular firms or persons engaged in similar business. Therefore

the question that arose in the house naturally was:	when will these new amendments,
amendments before parliament for the first time, come into force and effect? In the house on that occasion I raised the question, sir. It is to be found at pages 2503 and 2505 of Hansard of November 30, 1949.
May I remind you, sir, that the essential provisions designed to make the tax applicable to persons engaged in the manner I have described were sections 5 and 7 of Bill No. 175. When section 5 was reached I am recorded in Hansard as having said this:
Sections 5 and 7 are related for the purposes of the matter I should like to raise, which has to do with the imposition of an excise tax on the assembly of watches, clocks and certain kinds of jewelry. If I am correctly informed, this has become the subject of litigation as well as having been agitated by correspondence with and representations to the government. I understand that this litigation is pending and I am concerned as to whether this legislation will not cut right across the issues involved in the pending litigation which directly concerns the government.
Then the report proceeds, the parliamentary assistant to the Minister of Finance being in charge of the bill at this committee stage:


Mr. Sinclair:: The hon. member has put his finger on an amendment which I propose to move a little later. It is quite true that a case involving sections 5 and 7 is now before the courts, but I would direct his attention to the fact that section 14 provides for the coming into force of sections 5 and 7. When that section is reached I propose to have a minister move an amendment which would change the present date of March 23. 1949, to November 10, the date when first reading was given to this bill. There would then be no retroactive effect which would have a bearing on the cases before the courts.
I am recorded as saying:


Donald Methuen Fleming: May I express my complete gratification at that announcement.
Now, sir, I happen to know that I was not the only member in the house making representations on this subject. I know that at least one or two hon. members on the government side of the house were making representations to the government at the same time for the same purpose, in the interest of fair play, with some regard for the rights of persons then under litigation in the courts of law. There is one member, then a private member, who is a member of the government today, who I happen to know was making the same kind of representations, and who shared with me on that day the same gratification that I am recorded as having expressed here to the government for giving the assurance that amendments were being introduced which would have the effect of preventing any application of this new bill to the litigation then before the courts.
Then at page 2505 the amendment that the parliamentary assistant to the Minister of

Finance had referred to on page 2503 was introduced, and the report reads:
On section 14-Coining into force.


James Sinclair: This is the section on which the
minister will move the amendment about which I spoke in answering the hon. member for Eglinton. The amendment is as follows:
That subclause (2) of clause 14 of Bill 175 be amended by striking out the words "second day of May." and substituting therefor the words "tenth day of November."
That is the date when this change first became public knowledge by reason of the first reading of the bill.


Clarence Decatur Howe: I so move.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Then we read on page 2506:
Bill reported, read the third time and passed.
The bill was passed, sir, on the strength of the statement made on behalf of the government by the parliamentary assistant to the Minister of Finance when he said:
The hon. member-
Referring to what I had said-
The hon. member has put his finger on an amendment which I propose to move a little later. It is quite true that a case involving sections 5 and 7 is now before the courts, but I would direct his attention to the fact that section 14 provides for the coming into force of sections 5 and 7. When that section is reached I propose to have a minister move an amendment which would change the present date of March 23, 1949, to November 10, the date when first reading was given to this bill. There would then be no retroactive effect which would have a bearing on the cases before the courts.
What do we And, sir? We find that the government has, in the litigation which was then proceeding in the courts, set up that the bill then passed by this house and the other place later, on that representation and statement, did apply to the then pending litigation, and thereby defeated claims made in that litigation by those plaintiffs. The litigation that I mention is the litigation that the parliamentary assistant was referring to on that occasion. There is no room for any misunderstanding. But we find that in this litigation this bill, having been passed by parliament on that occasion, November 30, and having received royal assent and come into effect on December 10, 1949, is, if you please, set up by the crown in the pending litigation for the purpose of defeating the claims of the litigants.
Had it not been for the effect of the bill passed by parliament in November, it is quite clear from the course the litigation has taken, both before Chief Justice McRuer at the trial and before the Ontario Court of Appeal, that those litigants would have been completely successful. They would have been awarded the declaration which they sought in their plea.
Excise Tax
This is the language of Chief Justice McRuer in the case. The case is the Gruen Watch Company versus the Attorney General of Canada, and it is reported in 1950 Ontario Reports at page 429. It is a very lengthy judgment of the chief justice of the high court. I quote from his judgment at page 450:
Had I been trying the action prior to the 10th December, 1949,-
May I interject, sir, that this reference is to the date on which this new bill came into effect. It received royal assent and came into effect on December 10.
Mr. McCann:: Was this at the appeal?


Donald Methuen Fleming: No; this is the judgment of
Chief Justice McRuer at the trial. In a moment I shall have occasion to refer to the recent judgment of the court of appeal. I continue:
Had I been trying the action prior to the 10th December, 1949, I would have made a declaratory order that the plaintiffs were not liable to pay excise tax in respect of the goods in question either on importation or on delivery to purchasers and that they were entitled to have such goods pass through customs upon payment of the lawful taxes then in force.
I also think that in such case the jurisdiction of the court should have been exercised to declare the regulations of the 19th April, 1949, ultra vires.
Then he refers to certain English decisions, and proceeds:
This peculiar right of recourse to the courts is a valuable safeguard for the subject against any arbitrary attempt to exercise administrative power not authorized by statute, and judges ought not to be reluctant to exercise the discretion vested in them where a declaration of the court will afford some protection to the subject against the invasion of his rights by unlawful administrative action.
Chief Justice McRuer went on to make it clear that, apart from this bill passed by the house on November 30, he would have given effect to the plea of the plaintiffs for the declarations which they sought. He would also have held that the resolution of March 22 introduced by the Minister of Finance (Mr. Abbott) would have no application to the business carried on by these firms and, secondly, that the regulations issued by the Department of National Revenue in pursuance of that budget resolution which had no force or effect whatsoever, in law, were thus invalid and ultra vires.
But the defendant in the proceedings, the Attorney General of Canada, set up as a defence, if you please, the legislation which was passed in November, and in the very teeth of the undertaking given to the house to which I have referred, the undertaking given on behalf of the government that the bill then before the house would not apply to the pending litigation.

Excise Tax
The crown, as defendant, set up this legislation, this bill passed in November, as a defence in these proceedings. The chief justice of the high court, in the face of that, felt constrained to interpret that bill-contrary, I may say, to the understanding in the house-as applying to the pending litigation, and proceeded to hold that in the face of this November amendment he could not give effect to the plea of the plaintiffs in the action. That is the basis upon which his judgment proceeds, that the November amendment has application to the litigation before him.
Appeal was taken by the plaintiffs to the court of appeal of Ontario, and judgment was delivered on April 16, 1951. I might say briefly that the court of appeal in its judgment goes even further than did Chief Justice McRuer, in holding that the plaintiffs, apart from the November amendment, would have been entitled to everything they asked for. They would have been fully entitled to all the declarations they sought in their pleadings.
But the court of appeal felt its hands were tied by this November legislation which, contrary to the understanding in the house, and contrary to the assurance given to the house on behalf of the government, was then pleaded to defeat the rights of the plaintiffs in that litigation.
Now, everyone in the house who was present on that occasion accepted without question the assurance given by the parliamentary assistant on behalf of his minister, the Minister of Finance. If anyone in the house had had any question in his mind, after that assurance, that the bill could have any possible application to pending litigation, then certainly, had he raised the question, he would have been challenging the very plain statement and assurance given by the parliamentary assistant.
And yet-and here is where the bad faith enters into it, bad faith practised upon parliament, bad faith against subjects of the king in litigation pending in His Majesty's courts at that very time-notwithstanding those assurances given to the House of Commons; notwithstanding the interpretation put upon those amendments in the house when they were passed; notwithstanding the interpretation and understanding possessed by every member in the house, the crown, as defendant in the litigation, sets up this amendment as being applicable to that litigation- then pending, as having the effect of defeating the rights these plaintiffs had prior to the enactment of the amendment of November 30, 1949.
[Mr. Fleming.!
Sir, there was a time when the good faith of the crown was regarded as unimpeachable: it was accepted by all. It was the highest standard of good faith known in the land. But in these proceedings the good faith of the crown has been dragged into disrepute by His Majesty's advisers and representatives. By a deliberate government decision faith is broken with parliament. The statements made by the parliamentary assistant on behalf of the minister are soon ignored and, in effect, completely repudiated.
Counsel appearing in this case, on instructions of the Attorney General of Canada, simply acted-and could not do anything else -on the instructions given to him by the government, instructions which had the effect of reducing the assurance given in the house to the status of a scrap of paper.


James Joseph McCann: Why did you not insist that it be stated specifically in the act?


Donald Methuen Fleming: Mr. Speaker, when the government makes statements like these, I think hon. members are entitled to assume that the government speaks truthfully and that it means what it says. And if the minister-


James Joseph McCann: The court gave judgment because of the fact that it was not stated specifically.


Donald Methuen Fleming: And whose responsibility was that? The responsibility rests upon the government. Because what they have done was to repudiate the statement made on their behalf in the house as to the effect of legislation which parliament was then in process of enacting. It was a specific statement made on the government's behalf by a parliamentary assistant.
Is the minister going to say that when a parliamentary assistant speaking on behalf of his minister makes a statement to this effect, those statements are not to have truth attached to them, and are not to be believed?
Let me quote to the minister again these words uttered on behalf of the government, as they are found at page 2503 of Hansard for 1949, second session:
When that section is reached-
That is, section 14, which dealt with the date of coming into force of the amendment. -I propose to have a minister move an amendment which would change the present date of March 23, 1949, to November 10, the date when first reading was given to this bill. There would then be no retroactive effect which would have a bearing on the cases before the courts.
I may tell the Minister of National Revenue that if the law of this country permitted reference to debates in the House of Commons, in connection with litigation, that

would have been introduced. An attempt was made to introduce it, but counsel for the crown took the stand that it was irrelevant and could not be used in connection with the interpretation of the bill.
If the minister was in his place in the house . at that time I wonder why, in view of the calm attitude he takes today, in a situation where good faith is involved, I wonder why he did not rise in his place and correct the statement of the parliamentary assistant given on behalf of the government, if the minister knew that this amendment was intended to have or could have any bearing upon litigation which was then before the courts, and which was discussed on the floor of the house that night. I would like the minister to say whether he knew that the amendment was not going to have the effect stated concerning it by the parliamentary assistant to the Minister of Finance. Because-and let us take it both ways-if he knew that the amendment the parliamentary assistant was about to introduce was not going to have the effect stated concerning it by the parliamentary assistant, then what is to be said in the house as to the conduct of a minister who, knowing that that is not the effect, permits the House of Commons to be misled by statements which he knew were not in accordance with the facts?


James Joseph McCann: On a question of privilege, the hon. member should withdraw the statement that I allowed the house to be misled. 1 want him to understand that my position as Minister of National Revenue is not that of directing policy or making the laws with reference to the customs or Excise Tax Act. My position as minister of the department is one of administration. I suggest to the hon. member that it was his place to insist that that be stated specifically in the act. I am not a lawyer, nor am I competent to discuss this matter on its merits from the point of view of the law, but I do know enough to understand that both the trial judge and the court of appeal decided that unless it was stated specifically in the law, it did not apply.


Donald Methuen Fleming: 1 did not say that the
minister knew. I am inviting the minister to say whether he knew that the amendment introduced by the parliamentary assistant fell short of having the effect that the parliamentary assistant said it would. I asked the minister if he knew that. If so, I think we will have to say something in this house about his having sat back and permitted that statement to be made on behalf of the government by the parliamentary assistant. If the minister did not know, then I would like to know why subsequently his department
Excise Tax
takes the responsibility for Instructing counsel representing the crown in this litigation to repudiate completely a statement made to the house and on the strength of which the house accepted the amendment.
The minister talks about the effect of the amendment. When we came to section 14 on November 30 the parliamentary assistant rose in his place to introduce an amendment that sections 5 and 7 would not be deemed to come into force until November 10, 1949. I think we were prepared, and I think we were justified in being prepared to accept the statement made by those who spoke for the government as to the effect of the amendment. There was a plain and unequivocal statement by the spokesman for the government that the effect of this amendment would be to postpone the application of sections 5 and 7 of the bill and that therefore the amendment would have no application whatever to the litigation then pending in the courts of law.
What has happened is crystal clear. The government has reduced to shreds and tatters the good faith of the crown. The government must take the responsibility for having in the most callous and barefaced manner broken good faith with this house. If we are to be told now by the Minister of National Revenue that from now on we had better be on our guard about statements emanating from spokesmen for the government as to either the effect of-


James Joseph McCann: My hon. friend cannot put words into my mouth that I did not use. He can banter away with lawyers if he wants to, but I have common sense enough to know when he is trying to put something into my mouth that I never said or never thought.


Donald Methuen Fleming: I say to the minister that his words are on Hansard, the interjection he made a moment ago, and the plain interpretation of those words or the sense that one could draw from them amount to this: Anybody in this house had better be on his guard in the future as to accepting statements emanating from government spokesmen as to the effect of amendments they are introducing in the house or as to the use they are going to make of such amendments with respect to existing litigation on the rights of His Majesty's subjects.
The minister said, "Why didn't you see to it that the amendment went as far as the spokesman for the government said it would go?" My answer is that I did what other hon. members did. I thought we could accept a statement made in intended good faith on behalf of the government for the purpose of inducing this house to take a particular

Excise Tax
course and to pass legislation in the form in which it had been introduced in sections 5 and 7 of this bill.
The minister says that he is concerned only with the interpretation of the act. Have we in this government a series of watertight compartments? Can the representative of one minister state to the house that this legislation will not have any retroactive effect upon the pending legislation that is being discussed on the floor of the house, and then can another minister come along and say, "I am not concerned with what is said in the house. It is being applied in the courts of law and there is an amendment there which does not represent what the house understood it did. I have a weapon in my hands to beat the litigants in a case which is now pending".
That is precisely what happened. The Minister of National Revenue in effect pleads before the house today that he is not responsible for a statement made to the house by the parliamentary assistant to the Minister of Finance, that his task is one of administration and apparently in that task of administration he can proceed roughshod ahead without the slightest regard for statements made to this house as to the interpretation that will be given to these amendments.
Where has the good faith of the crown gone in all this? This government has reduced the good faith of the crown to shreds and tatters. It has been proved by this utterly disgraceful incident'-


James Joseph McCann: This is a fine forum for you to earn your fee in.


Donald Methuen Fleming: I want either a clear statement from the minister or a withdrawal. If he says that I am earning a fee in raising this question, I want him to say so because he will have to withdraw that statement for it is an utterly untruthful statement. It is a base insinuation and I give that to the minister in his teeth. If the minister has not enough moral perception left to see that there is an issue of good faith being raised here then we have come to a very sorry pass indeed.


Mr. Deputy Speaker:: The hon. member has exhausted his time.


Mr. Drew:: I suggest that there is something that should be withdrawn. There is no question about the imputation made by the minister. The minister should either make it perfectly clear that he carelessly made an imputation, or he should withdraw it.


James Joseph McCann: I have nothing to withdraw.


Donald Methuen Fleming: When the minister stands up and says that this is a fine forum for me to

be earning my fee in there is no other interpretation to be put upon that than that I am receiving a fee for raising this question in this house. There is not a word or syllable of truth in it. I ask you to call upon the minister to withdraw that base insinuation.


Mr. Fournier (Hull):: May I just intervene for a moment. When we hear language used such as disgraceful and untruthful and words like that, I think we must assume that it is used in a moment of nervousness. Perhaps both sides have exceeded the limits and might be advised to use more parliamentary language in. carrying on this discussion.


Mr. Deputy Speaker:: I understand that the minister had no intention of imputing motives.


James Joseph McCann: Will the hon. gentleman deny that he has acted in his legal capacity for some of these people concerned?


Donald Methuen Fleming: There is more of the same contemptible insinuation. I have never acted for any of these litigants in any respect at any time. I am here in my capacity and on my responsibility as a member of this House of Commons to put before the house a grievance, something that should certainly be aired here and which affects the good faith of the crown. The minister does not reduce or palliate the insinuation he made a moment ago by getting up and asking that question. I ask you, Mr. Speaker, in fairness to members of this House of Commons, and under the rules of the house, to call upon the minister to withdraw any statement and insinuation of that kind, an insinuation that he has repeated now by this question.


James Joseph McCann: Mr. Speaker, I accept the word of the hon. gentleman. If I have said anything which hurts his feelings or is unparliamentary I will withdraw it.


James Sinclair: Mr. Speaker, I should like to say a word or two on this matter because my name and the statement I made two years ago have been mentioned. The first point raised by the hon. member was the fact that the resolution was brought in in March, parliament did not actually adopt the resolution and the bill until November, and royal assent was not given until December. Of course that is the practice in this parliament. So far as excise tax changes are concerned, and for that matter so far as all tax changes are concerned, the night that the minister makes the budget address the tax changes are regarded as then being in effect. If parliament should later disapprove of the tax changes, then the people who paid1 the tax in the interval would

get a refund. If parliament confirms the tax changes then of course collection proceeds in an orderly fashion.
The British have a little different system. They pass a special bill to cover the gap between the introduction of the budget and the adoption of the bill. I well remember the incident, although not the details to which the hon. member referred, because between the introduction of the resolution in the spring and the actual passage of the resolution and the bill in the fall the hon. member for Eglinton (Mr. Fleming) and one or two other hon. members, in whose ridings there are watch-making industries, raised this question. There was one particular case of litigation before the courts concerning a ruling of the taxation department as to whether or not the case and works if imported separately constituted the importation of a watch.
Because of the interest shown by members, the minister himself looked into the matter. I piloted the excise tax bill through that year as I have done in other years, and it was on the minister's instructions that I moved the amendment to which the hon, member has referred. Certainly I was acting for the minister and speaking for him. I must confess that I have not followed the court cases. I would not be expected to for two reasons. First of all I am not a lawyer, and second, the administration of this act once it is passed by parliament falls under the Department of National Revenue. One thing concerning which I am a little surprised, however, is that I cannot recall any correspondence between the hon. member and the minister in that time, and I do see that part of the minister's mail affecting the part of the department with which I have something to do. That is why I am not prepared to answer today.


Donald Methuen Fleming: May I tell the hon. member there was no correspondence between the minister and myself. I know that representations were made by Liberal members to the same effect. I made my representations in the house, and I lave referred to the quotations from Hansard.


James Sinclair: The point I am making is that this happened two years ago, and it comes as somewhat of a surprise to have a matter raised which is now two years old. The assurance I gave at that time for the minister apparently is the key to the case. I do not know why the hon. member did not come to me in the interval and say: Sinclair, were you speaking for the government when you gave that assurance? Or to the minister and say: Was your assistant speaking for the government? My point is that I am not prepared
Excise Tax
to answer now because this is the first intimation I have had about the matter. However, I will say that when the excise tax bill is before the house next week the minister, or if he should not be available I myself, will make a statement at that time on the issue the hon. member has raised.


Donald Methuen Fleming: May I tell the hon. member on that point that I am aware there has been voluminous correspondence exchanged between counsel for these litigants-and incidentally he is a well known Liberal-


James Joseph McCann: That does not matter.


Donald Methuen Fleming: -and the minister and
officials of his department. There is voluminous correspondence in which these same complaints have been made about a breach of faith.


James Sinclair: I am not concerned about correspondence between counsel and the department. I am a parliamentary assistant. The words which were referred to by the hon. member, and upon which apparently the hon. member makes his case, are words that I as a parliamentary assistant used in the House of Commons. Therefore I would have thought that if he really wanted to know whether this statement was made on the authority of the government he would have come to me some time ago or to the minister instead of raising the matter suddenly in the House of Commons. If he wants to do that it is within his rights to do so, but because of the way he has done it I cannot answer him today. However, I will give the assurance that next week when the excise tax bill for this year is before the house, the minister or myself, if the minister is not available, will answer the points he has raised today.


Donald Methuen Fleming: On a question of privilege, may I point out to the hon. member that the court of appeal gave judgment in this case on April 19. The point could not be raised in the house while the matter was sub judice. It is just a month ago that judgment was finally given in this case.



POST OFFICE


Major James William Coldwell: Mr. Speaker, I too have a grievance that I want to air very briefly this afternoon on behalf of my constituents. Among the veterans housing projects is one which is in my constituency but is adjacent to and often considered to be within the city of Saskatoon, although it is just outside the city limits. These veterans were established there, built their homes under the Veterans Land Act, and settled there with their families. Of

Postal Service
course they required certain facilities including postal service. The matter was taken up with the Post Office Department, and as a result after two years of negotiation they were accorded the privilege of having their mail taken from the city of Saskatoon post office for distribution in the area known as Montgomery Place. I think I cannot do better than to put the correspondence on the record. May I say at once that if anyone raises a question about reading correspondence in the house, it is available to the house, and I shall be prepared to table it or do whatever is suggested regarding it. The first recent letter which has a bearing on the matter was written from Saskatoon and is dated October 23, 1948. It is from the office of the postmaster at Saskatoon and is addressed to Mr. G. Edwards, president, Montgomery Place ratepayers association, Saskatoon, Saskatchewan. It reads as follows:
Several months ago a request for postal services for the residents of Montgomery Place was received and forwarded to the Post Office Department for consideration. Although the total number of residents in the community is small-
I believe the number has grown since.
-the Post Office Department, following its policy of providing the best possible service to the people of Canada wherever feasible, has now arranged for a daily service to your community. On this inaugural day, on behalf of the Post Office Department I wish to extend to you and the residents of Montgomery Place our congratulations on the commencement of this new service. We trust that this service will prove adequate to your needs for postal facilities, and wish the community continued growth and prosperity in the coming years.
Yours very truly,
H. F. Hardy, postmaster
In other words, the representations of the veterans living at Montgomery Place were reviewed by the Post Office Department, obviously at Ottawa. After that review facilities were accorded and they were congratulated in the autumn of 1948 on the inauguration of this service. Everything went fairly well until a week or so ago. Then quite suddenly Mr. Tregaskis, who is now president of the Montgomery Place ratepayers association, received a registered letter reading as follows:
Dear Sir:
I have received a letter from the director of communications in which I am advised that our department is not prepared to continue payment for the mail service which has been in existence between Saskatoon city office and Montgomery Place. It appears that this arrangement, which has been in effect for two and a half years, is not in accordance with the general policy of the department.
The service was authorized in the first place through a misunderstanding or a lack of understanding in the department as to the whole situation, and it has been decided to discontinue this service.
[Mr. Coldwell.l
If I may comment there, when a service of this sort is requested and representations are made over a period of time, in this instance two years, surely the officials of the department should have no misunderstanding, certainly no lack of understanding of what the situation happens to be. I continue reading the letter:
Accordingly, Mr. A. C. Suffredine, the contractor for service between Saskatoon and Montgomery Place, is being notified today-
That is May 16.
-of the termination of the temporary arrangement under which he has been operating, to take effect at the end of the present month.
I have been asked to add that if the residents of Montgomery Place wish to have the service' continued and are willing to make suitable arrangements at their own expense, there will be no objection by our department. In any such plans which might be made by your association it would necessarily be understood that the responsibility of the Post Office Department would end with delivery of mail to the representative of your association at the city office.
Will you please advise members of your association at the earliest possible date.
Yours very truly,
L. S. Cumming,
District Inspector
In other words, two weeks' notice is given of the discontinuance of this service. If these people desire it continued they must pay for it themselves. Several post office matters of this description have been raised in this house in the past several weeks. I have always understood the post office was a service organization giving service to the citizens of Canada. Apparently just lately something has happened to the Post Office Department, and services that have been given are being withdrawn-I think I use the word advisedly in the light of this letter-arbitrarily.
Of course a protest has been made through the president of the ratepayers association. I might as well put that on the record too. It is dated May 21, 1951, and reads:
The Director of Postal Service,
Ottawa, Ontario.
Dear Sir:
It was with great surprise that we received the attached copy of a letter from Mr. Cumming, the District Postal Inspector.
We would like to point out that it was with great difficulty that we obtained this service after two years of correspondence and interviews.
I know that to be the case, so there should not have been any misunderstanding or lack of understanding in the first place as to what this service involved. As I have said, I think the negotiations did cover a period of approximately two years.
When the service was instigated, we were of the impression that everyone concerned was very pleased to extend the service.

That would be indicated, of course, by the letter from the Saskatoon postmaster to the president of the ratepayers association of that day.
It would seem to us, that if there had been an error in supplying the service it should have been caught before two and a half years had gone by.
We hereby strongly protest the discontinuance of this service and ask that the matter be given further review with the circumstances of all concerned be taken into consideration, and a full explanation as to the reason that this service cannot be supplied.
The Montgomery Place Ratepayers Assoc., I. G. Tregaskis, President.
I may add that a copy of this correspondence was sent to me, and I see from the note on this letter a copy was also sent to the member for Lake Centre (Mr. Diefen-baker). I believe this matter should be reviewed by the Postmaster General (Mr. Rinfret). I believe it will be reviewed favourably by the Postmaster General, because I think this is a case where a service was granted after two years of negotiation, where it has been in effect for two years and a half and is absolutely necessary to the people of the district. As the hon. member for Lake Centre will know, and the hon. member for Saskatoon (Mr. Knight) will know, this is in fact a suburb of the city of Saskatoon, although so far as parliamentary representation is concerned it is included in the constituency of Rosetown-Biggar which I have the honour to represent. I hope the Postmaster General will see that this situation is carefully and sympathetically reviewed. I believe that when he thus reviews it he will see the justice of the protest that is being made, and of the representations I am making in which perhaps other members will join me. That, Mr. Speaker, is the matter which I rose to deal with primarily, but there is one other grievance that I wish to bring before the house while I am on my feet. It will take only a very few minutes.
This concerns the matter raised by the member for Huron North (Mr. Cardiff) yesterday, cement. I listened to what the Minister of Trade and Commerce (Mr. Howe) said, that he had no responsibility in that regard, but I believe the government should assume some responsibility. I am saying that because again today I had a telephone call from a small contractor just before I came to the house this morning who, in common with other small builders and contractors who have spoken to me or those associated with me, is unable to get supplies of cement.


Mr. Fraser:: Unless they pay through the nose.


Major James William Coldwell: I was just going to say that this contractor, who lives in southern Ontario,
Postal Service
telephoned me this morning and said he had been unable to get a bag of Canadian cement to fulfil his contracts. He has had to buy imported cement from the United States.


Gordon Knapman Fraser: Or Belgian or German cement.


Major James William Coldwell: I do not know whether it is German or Belgian. I do not know whether he has been buying imported cement from those countries. The price of the Canadian cement was $1.15 per hundred pounds, and for the United States cement after the duty is paid on it, $1.75 per hundred pounds, about 60 cents difference in the price. If this man agreed to get ready-mixed concrete from the big cement mixers, he could get it delivered but he wishes, naturally, to mix his own concrete. He believes there is an unfair distribution of this product. In fact, it has been suggested to me that the big concrete mixing concerns are obtaining practically all the Canadian cement available because of their relationship or the relationship of some of their directors with the manufacturing companies. Of that I cannot say anything because I do not know. But I do know that this is a matter which requires the attention of the Minister of Trade and Commerce and the members of the government, so that there may be a fair distribution of this important building commodity at a time when many people with small financial resources are trying to build homes and so on in our country, and to improve their property generally. Since I am on my feet I thought I might bring that to the attention of the Minister of Trade and Commerce in the hope that consideration will be given to this matter. I notice the minister said yesterday that he had not received any complaints. It is a strange thing that some of the rest of us have received complaints coming all the way from, as I said just now, a small city to the south of us right to Halifax, Nova Scotia. I am surprised that the minister has not received complaints; but at least I am bringing to his attention the specific complaint I have today because I believe that the discrimination is fairly widespread across the country at the present time.


Mr. R. R. Knighi (Saskatoon):: Mr. Speaker, I should like to spend a moment or two in supporting the theme of the hon. member for Rosetown-Biggar (Mr. Coldwell) in regard to the mail service at Montgomery Place. I have here in my hand some correspondence on the matter which goes back over the last year or two; but I shall not take the time of the house to read it, as my leader has already used some of his. Montgomery Place is a veterans small holdings settlement just outside the west boundary of the city of

Postal Service
Saskatoon. Prior to the last electoral redistribution, this settlement was within the boundaries ot my constituency. But for some reason the redistribution committee saw fit to give it to my leader, the hon. member for Rosetown-Biggar.
In passing I should like to say that I think where a city constituency has any rural lands at all close to it, some little space around the city's boundary should be part of the city itself because there are many people who live close to the city and whose interests are in the city. May I say that the people in Montgomery Place are in that position. They send their children to school in Saskatoon, they do their shopping there, and so on. They are really Saskatoon people, and that is the reason for my interest in them today.
Montgomery Place is a settlement of progressive young veterans. They have a sort of little civic organization of their own there which promotes their community interests. They have fought for their rights. They have had trouble with transportation; they have that now. As my hon. friend has shown, they have a problem with respect to getting mail service. It was only ia limited mail service but it was a useful one, and they engaged in a long struggle for it. I spoke in this house at the time in their support. The mail was taken out from the post office and distributed locally. As I say, these people carry out all their business-except perhaps the one business of voting-in the city of Saskatoon. Up to the present time they have been served by the Saskatoon post office. As I say, they might be termed Saskatoon people. I would join in the plea made by my hon. friend that this service which they have, and which they now enjoy, should be left with them.


Édouard-Gabriel Rinfret: Mr. Speaker, I do not want to intervene in this discussion. I have not before me the information that would be necessary to answer the charges that have been made against the Post Office Department.


Major James William Coldwell: Mr. Speaker, I hope the
minister will not think that I was making charges. I was making representations.


Édouard-Gabriel Rinfret: I came into the chamber just at the end of the hon. member's speech. I do not know what was said before that. But I was not referring particularly to the speech of the leader of the C.C.F. (Mr. Cold-well); I was referring to some of the other speeches that had been made in the house.
It seems to me that all these complaints that have been made against the Post Office Department could properly be discussed when the estimates of the department are

called before the house, at which time the department officials will be here, and we shall be able to give all the necessary answers. I may say that there are answers to every one of those complaints. As to the question raised by the leader of the C.C.F., may I say that I will certainly look into it. I tried to obtain some information over the telephone a moment ago, but the officials had gone home.


Major James William Coldwell: May I say that the reason I raised this matter this afternoon-I received the complaint this morning-was that the service is to be withdrawn on May 31. It was a matter of urgency.


Édouard-Gabriel Rinfret: I will look into the matter.



INCREASE IN EXPRESS RATES

Mr. G. C. Nowlan (Annapolis-Kings):: Mr. Speaker, there is a matter that I should like briefly to bring before the house at this time, arising out of a development which occurred yesterday when it was announced that the express rates on shipments of fish from the maritimes to other parts of Canada-and I presume that this would apply to express rates on shipments generally-have been increased by amounts averaging up to 53 per cent of the rates prevailing only a short time ago.
This is a matter of particular importance to the fishing industry of the maritime provinces in general, and particularly in my own constituency where we catch and process a substantial quantity of fresh fish. I am not going to take the time of the house to emphasize the importance of this industry to the maritime provinces in general and to our own province in particular. I think the figures would substantiate the fact that approximately 35,000 people are engaged in this industry in the maritime provinces, not including the new maritime province of Newfoundland; and that last year the value of the fresh fish that was exported-that is, fresh and frozen-was over $33 million. Of that shipment, according to the figures of the Canadian National Railways, over 10 million pounds was sent to Canadian points by express.
That is a substantial quantity of fish moving in that way, although it is true that a larger proportion is hauled either by truck or by freight; and of course that is not affected by the increase. But there are particular advantages in express shipments of certain types of fish; and for those types, it is almost essential. This increase is going to weigh heavily upon the producers.
Unfortunately, despite the importance of the fish industry, as we all know the consumption per capita is not as great as we

should like to see it. The per capita increase in the consumption of meat, for instance, between 1939 and the present time was relatively great. I have the figures here, and I will put them on the record briefly. The consumption of meat then was 118 pounds per capita. That consumption has gone up now to 138 pounds per capita. On the other hand in the same period consumption of fish per capita has gone up only from 11-9 pounds to 12-3 pounds, a minor increase, despite the fact that the increased cost of production has been far less than the increased cost of the production of meat. This fact shows that there is a certain sales resistance to the marketing of this product, which has an adverse effect upon it.
There is no doubt in my mind that the increase in these express rates will adversely affect the sale of this product in the Canadian market. Although our consumption per [DOT]capita is low as a nation, we find that the farther one gets away from the seaboard, the lower that per capita consumption falls. For instance, in Halifax I believe we have a consumption of 35 pounds per capita. When you get to Montreal, that consumption falls to 17 pounds; when you get to Toronto it falls to 15 pounds; and, as I have said, the average for all Canada is less than 12 pounds per capita. An increase of 53 per cent in rates-[DOT] all the rates are not that high; the increases run from about 20 per cent to over 53 per cent-is going to result in one of two things. Either the consumer will have to pay more or the producer will get less. I do not think there can be any alternative to that whatsoever. If, as I have suggested, in view of the sales resistance, the consumer will probably not pay more, the producer will therefore be compelled to take less if he is going to remain in business. In other words one might say that this will be another indirect tax passed on to the producer and which he will have to bear. I am not at the moment criticizing the express companies for having increased those rates. They have, of course, to earn a profit on the business which they are doing. Possibly they can justify, or have justified, that increase, although I know that many suggestions could be made whereby they could reduce their tolls; but that is a matter which I think deserves the attention of the government.
This government and preceding governments have done a great deal for the development of the fisheries. This government today is spending thousands and perhaps hundreds of thousands on biological research, in development of processing, and in assistance in many ways. All that money is well spent. We appreciate it, but unless you can put your product on the market, sir, unless 80709-212J
Fisheries
you can maintain your markets, then those other expenditures are wasted. The money might just as well go down the drain.
The government, having the interests of the industry at heart, I suggest must do something about this new situation which confronts it at the present time. I have a statement which the Minister of Fisheries made some two years ago. The then minister of fisheries said this on May 5, 1949, in so far as the government's responsibility for the fishing industry is concerned:
This government over the next five years should take further positive steps toward the greater realization of the great fishery potential of the dominion. To help develop these resources and to expand the markets at home and abroad, the federal government should co-operate with the fishing industry in a program of development on the following lines.
I am quoting only one of them.
(a) for the industry as a whole the federal government should aid both in production and in the greater development of distribution, particularly in the domestic market.
Now, sir, this is a problem of distribution in the domestic market, and a problem which affects the future of this industry in so far as fresh and frozen fish are concerned. It is of tremendous importance to eastern Canada. The industry can grow and develop into a very vital economic factor-it is that anyway. It can develop into a still greater factor. Modem processing equipment and quality products, which are now being produced, augur well for the industry, provided that transportation facilities at a reasonable cost can be made available to the industry. I direct the attention of the government to that.
One other matter, Mr. Speaker, while I am on my feet, with respect to the fishing industry; this is a matter which I am sure has been directed to the minister's attention already. Within the last day or two resolutions have been sent to me concerning the effect of the operation of trawlers in the bay of Fundy and in St. Mary bay. The valley boards of trade, representing all the boards of trade in my constituency and I believe in the constituency of the hon. member for Digby-Yarmouth, joined in a resolution, the original of which was sent to the Minister of Fisheries (Mr. Mayhew) or is in transit to him, and a copy of which was sent to me.
The situation there is a most serious one. In the old days, as you know, fishermen along that coast were fishing with hand trawls. They were what are called line fishermen. During the last two years there has been quite a development of the trawler. Everyone realizes that, so far as the deep sea fishermen are concerned, trawling is

Fisheries
absolutely essential. That is the only way in which you can get large quantities of fish, process them and bring them to market and maintain adequate supplies. But here we are dealing with inshore fishermen, fishermen who go out in little rowboats or motorboats two or three miles off their coast, fishing in inland waters. The operation of the trawler is an entirely different thing
You have two types of trawlers operating, sir. You have the large trawler, the deep sea trawler, coming into the bay of Fundy. There are American trawlers for example operating within three miles of our coastline; but sometimes their navigational aids apparently are in error, and they are found strangely enough close to the coastline, especially on foggy nights. They have been found within a hundred yards of the coast where they have been known to catch lobster pots. That was an error on their part, perhaps. Whereas our Canadian trawlers, operating with Canadian crews, financed by Canadian money, government assistance, are not licensed by this government except conditionally on their remaining twelve miles off our coastline, it is certainly an anomalous thing, Mr. Speaker, when United States trawlers, operating with United States crews and United States money, are allowed to fish within three miles of our coastline. The menace of the trawlers is such that we prohibit our own trawlers from operating within twelve miles. I presume that is a matter for negotiation with the United States government. It is a matter certainly on which some action should be taken.
Then there is the smaller trawler, the otter trawler, which operates under a different licence, and is allowed to fish anywhere near the shoreline. I see by the resolution which came to me this morning from the boards of trade that in the little waters of St. Mary bay, an inland arm of the bay of Fundy, 23 flounder trawlers were operating there the other day and five haddock trawlers, 28 trawlers in all in a little narrow arm of water, catching on the average around 8,000 pounds of fish a day, catching everything, big and small, with spawn and everything else, and each day throwing out hundreds of thousands of fish into the waters, which pollute the water, destroying the fishing beds and destroy the gear of the inshore fishermen.
The big haddock on the coastline of the bay of Fundy that come up there in the spring and summer to spawn and which go back in the fall have been caught for years by our hand fishermen, who thereby have been able to earn a reasonably good living. Now, all these fishermen are finding it extremely difficult to catch fish. The trawl-
[Mr. Nowlan.l
ers are capturing these fish by the thousand, and the hand-line fishermen who fish out of these little villages from Scotts bay right down to Victoria beach, in the constituency of the hon. member for Digby-Annapolis, are facing ruination unless some action is taken in the very near future.
I bring this matter to the attention of the minister and urge that, with respect to the operation of the large trawler, negotiations be entered into with the United States government to prohibit unconditionally their entry into the bay of Fundy. So far as the otter trawler is concerned, the small trawler, they should be relicensed, and licensed conditionally on their operating at least three miles off our coastline.



INTERNATIONAL WHEAT AGREEMENT AND CANADA GRAIN ACT

John George Diefenbaker: shall take but a few minutes to bring a matter to the attention of the government. It arises out of the question asked today by, I think, the hon. member for Melfort (Mr. Wright) as to whether or not at the present session any amendments were to be made to the Canada Grain Act. The reply of the Minister of Trade and Commerce (Mr. Howe) indicated that such a possibility did not exist.
I rise for the purpose of bringing the attention of the government to two matters that are more or less connected with the question that was asked by the hon. member. On May 16 the question was asked the Minister of Trade and Commerce by the hon. member for Assiniboia (Mr. Argue), followed by a question by myself, which questions appear on Hansard at page 3077. The hon. member for Assiniboia said:
I should like to direct a question to the Minister of Trade and Commerce. In view of rising costs of production and an increasing world price level, has the government made any attempt to have reviewed the present ceiling price under the international wheat agreement?
To which the Minister of Trade and Commerce replied:
The international wheat agreement is an agreement among some forty governments. It is now in its second year of operation, and the only action Canada could take to vary its terms would be to denounce it. Canada has no intention of denouncing it, nor has it any desire to do so.
Then the hon. member for Assiniboia added this question:
Could the minister not say whether any effort has been made to call in the countries and to talk it over?
No answer being given, I asked this question:
Without there being any repudiation of the international wheat agreement, could not the government

give consideration to communicating with the signatories to the agreement with a view to a revision in prices, having regard to increased costs?
Then the Minister of Trade and Commerce replied:
There are three producing countries involved in the agreement, and at least thirty-seven consuming countries. My hon. friend is optimistic if he thinks that the wishes of the three would prevail against the wishes of the thirty-seven. I presume that the signatories to the agreement would have equal standing in the agreement.
Having regard to the general attitude today in the western provinces, that under the international wheat agreement great losses will be suffered by the Canadian farmers unless there is a revision, that there has been a greatly increased cost of production to farmers, that the agreement is one which endeavours by anticipatory vision on the part of the government to determine conditions in the future, and that having regard to present world conditions, and the probability of those conditions continuing and bringing about a loss to Canadian farmers amounting possibly to hundreds of millions of dollars, something should be done now to secure a reconsideration of the basic prices laid down under the international agreement.
I realize that everything we might want cannot be secured upon request. But at least one would expect the government of the day to sound out the possibility of something being done under that international wheat agreement which does, in fact, contain a provision for periodical revision of price levels.
Yet the attitude of the Minister of Trade and Commerce (Mr. Howe) is simply one of brushing the question aside. There are only three countries which are producers, he says, and thirty-seven that are consumers; and he brushes aside as being impossible the success of any application on the part of the Canadian government for a rewriting of price levels. The international wheat agreement provides for a rewriting of the terms, and for periodical revision. Under that agreement, which will run until August 1, 1953, wheat this year brings $1.80 at Fort William to the Canadian farmer. It provides for the disposal of 500 million bushels of wheat, as follows: Canada is to supply 230 million, the United States is to supply 185 million, and Australia, 85 million.
I make the request of the government that it do something by way of endeavouring to secure a revision in price, in order to secure an increase in the minimum price, as at present set down in the agreement. Unless that is done this international wheat agreement will result in losses being suffered by the Canadian farmers beyond anything
Wheat and Coarse Grains we can comprehend at the moment. It is a serious question and deserves more serious consideration on the part of the government than for the Minister of Trade and Commerce simply to brush it aside by saying, in effect, "We have not done anything, because I do not believe that doing anything would secure any results."
I think the time has come for the Canadian government to point out the situation- for, after all, it controls, the wheat board, which in recent years has been its puppet for the purpose of carrying out government policy. I believe something can be done, with the international situation as it is today. Nations that are signatory to the international wheat agreement will realize that in the interests of our common defence, if for no other purpose, the producers in the producing countries should be assured a fair and reasonable price, or one more in keeping with present conditions than the international agreement provides.
Secondly I suggest that amendments are necessary to the Canada Grain Act. I say this because of certain facts which have come to light in connection with overages that elevator companies have been able to secure during the last few years. In the report of the wheat board, part IV, addressed to the Minister of Trade and Commerce and signed by the board, there is this paragraph that is of interest to every farmer in the prairie provinces. It states in part:
Deliveries to the board on the 1945-49 pool account totalled 1,435,955,510 bushels, of which 1,427,587,096 bushels were purchased from producers and 8,368,413 bushels were purchased from other than producers. The latter purchases represented principally country and terminal elevator overages purchased from agents of the board and for which no producers' certificates were issued by the board.
This means, if these figures are correct- and I believe they are-that the amount of the overages for which payment was not received by the farmers who produced the wheat in that period was 5,621,938 bushels.


Mr. Mcllraith:: Would the hon. member
permit a question? I notice that in placing the figures on record he uses the words "wheat" and "grain" interchangeably. I presume the hon. member is referring to grain.


John George Diefenbaker: I am referring to purchases made.


George James McIlraith: Of grain.


John George Diefenbaker: By the wheat board.


George James McIlraith: Of grain, not wheat.


John George Diefenbaker: The overages totalled 5,621,938 bushels. That is a great many bushels of grain by way of overages for which

Supply
the farmers have received no payment. I feel there should be an investigation into this matter, with a view to determining the situation in connection with this whole question of overages, and also thereby providing an investigation into the necessity for the making of amendments to the law, so that this situation, if found to be unfair and unjust, will be changed. For, after all, our concern should be for the, producer to receive the largest possible return for that which he produced.
Therefore, to sum up what I have endeavoured to place before the house, I would say, in two sentences, first that the time has come for the government of this country to rid itself of the nonchalant attitude exhibited by the Minister of Trade and Commerce regarding the international wheat agreement, and to have representations made to the other countries signatory to the agreement to the end that, having regard to the increased cost of production in this country, there will, in fact, be a revision of the basic or minimum prices provided by the international agreement. That should be done now. This is 1951, and the agreement has still two more years to run. Certainly it will be a matter of great enjoyment to those countries that will be paying less than they should be paying if they know in advance that the Minister of Trade and Commerce simply takes the attitude that nothing can be done even though no repre-. sentations have been made.
Then, secondly, in connection with the Canada Grain Act, I say consideration should be given to the necessary revisions of the act, if upon investigation it is found that the present system does not properly protect the farmer and assure him proper payment for his product.
Motion agreed to and the house went into committee, Mr. Dion in the chair.



DEPARTMENT OF FINANCE

[Stage Direction]
General administration-
112. Departmental administration, $1,505,769.
Item stands.

[Stage Direction]
255. Departmental administration, $869,901.
Item stands.
[Mr. Diefenbaker.l
DEPARTMENT OF MINES AND TECHNICAL SURVEYS Administration services-
217. Departmental administration, $398,452.
Item stands.
Progress reported.


James Joseph McCann: the second reading of Bill No. 198, to amend the Customs Act.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Dion in the chair.
On section 1-Government vessels to report.
Mr. Macdonnell (Greenwood):: This section provides that all the provisions of the act relating to certain things "are binding upon His Majesty in right of Canada or a province." This seems to be a rather unusual piece of legislation which is binding, not only upon His Majesty in the right of Canada but also upon His Majesty in the right of a province. The explanatory note reads:
The proposed subsection is new and is designed to make it clear that federal and provincial governments and their officers must comply with such parts of the act as are designed to give that control of import and export which is essential to the proper administration of the act.
This section purports to go beyond the ordinary tenor of a dominion act and provides that it shall be binding upon His Majesty in right of Canada or a province. While the minister is explaining that, will he explain also just what is the gap in the legislation that this is supposed to cover?


James Joseph McCann: There is nothing new in the principle of it affecting provincial as well as federal authorities. As an example, it might be applicable in seizures by provincial authority of liquor coming into the country. They would have to be turned over to a customs official for appraisal.


James MacKerras Macdonnell: Do I understand that this legislation undertakes to deal directly and not through the agency of provincial officials? Is that its effect?


James Joseph McCann: This is to enact that a provincial official is not free from the application of the law any more than any person else. It applies to provincial officials as well as to federal officials.


James MacKerras Macdonnell: We understand that all citizens are bound by any law passed here. The minister has said that this was not unusual, but can he give us an instance that it has been done before? I repeat, we understand that this law will apply to everyone, but it seems to me that the minister is going beyond that.


James Joseph McCann: This new subsection merely clarifies the law by placing beyond doubt the legal obligation on all persons, including officers of the federal or provincial governments, to report to customs when entering or leaving the country. The noncompliance with this requirement of government-owned vessels, through misunderstanding of the law, has made it advisable to propose this amendment.
There may be unusual circumstances where for reasons of emergency or convenience certain exceptions might have to be made and, as will be seen later, section 9 of the bill enables the governor in council to exempt from the regulations certain cases or classes of cases. An example would be the reporting by Canadian naval ships in time of war.
The second part of the subsection is similarly intended to make it clear that officers of the crown in the right of Canada or of a province must, like all other persons, meet the requirements of customs in regard to importation of goods, including flotsam, jetsam or wreckage.


James MacKerras Macdonnell: The minister has said that this is not unusual. Will ne give another instance where legislation goes beyond dominion officials and is binding upon provincial officials?


James Joseph McCann: Subsection 3 of section 2 of the Customs Act reads:
The rates and duties of customs imposed by this act or the Customs Tariff or any other law relating to the customs, as well as the rates and duties of customs heretofore imposed by any customs act or Customs Tariff or any law relating to the customs enacted and in force at any time since the first day of July, one thousand eight hundred and sixty-seven, shall be binding, and are declared and shall be deemed to have been always binding upon and payable by His Majesty, in respect of any goods which may be hereafter or have been heretofore imported by or for His Majesty, whether in the right of His Majesty's government of Canada or His Majesty's government of any province of Canada-


[Stage Direction]
Section agreed to.
On section 2-Detention.
James MacKerras Macdonnell: I should
like to know something more about the acts which are referred to. The explanatory note reads:
The proposed subsection is new. A number of acts not administered by the Department of
Customs Act
National Revenue nevertheless contain clauses prohibiting under certain conditions import and', in some cases, export of goods of various classes. A customs officer while often directed by the act concerned to give effect to these prohibitions is under the section as it stands directed to release the goods immediately on payment of duty. The amendment will provide statutory authority for existing practice.
I should like reference made at any rate to some of the acts concerned, and I should also like an explanation of the statement that the amendment will provide statutory authority for existing practice. What has been the existing practice and what authority was there for it?


James Joseph McCann: As is indicated by the explanatory note, there are acts which permit importation or exportation of certain goods conditional upon their meeting specific standards or requirements laid down by other acts such as the Food and Drugs Act, the Fisheries Act, the Animal Contagious Diseases Act, the Seeds Act, the Fruit, Vegetables and Honey Act, and others. In such cases the government department responsible for the act enforced by our officers is the logical final authority as to whether or not the goods in question comply with the specific conditions or terms of entry. To refer such cases to the competent authority requires the temporary detention of the goods, and all the new section does is to provide the statutory authority for that detention.


James MacKerras Macdonnell: What authority has ther been in the past?


James Joseph McCann: It is doubtful whether there was any authority. This would save the importer a great deal of trouble and perhaps expense if after his goods were declared they had to be seized and the duty assessed by another branch of the government which could act under its act, for instance, the Food and Drugs Act.


James MacKerras Macdonnell: I think I can see the reason for it, but what I am interested in is this. I should like to know a little more about it. The minister said a minute ago that it is doubtful whether there has been any authority. How long has that been in existence, and what kind of things have been done without authority? Have people's goods been detained without any authority of any kind, and how does the point arise now?


James Joseph McCann: The point arises because of the fact that the act says at the present time that on the importer paying his duty the goods must be released immediately. We contend that it would be advisable to detain the goods until such time as we have received information from the other departments concerned as to whether that type of goods should be admitted to the country.

Customs Act


James MacKerras Macdonnell: Then do I understand correctly that the act has said that when the charges are paid the goods should be released?


James Joseph McCann: That is right.


James MacKerras Macdonnell: But notwithstanding that you have been detaining goods in certain cases because you thought, for the purposes of the other acts, it was the wiser course to follow. Is that correct?


James Joseph McCann: We try to co-ordinate one department with the other, and in some of the acts governing the importation of goods it says that they shall be held for examination.


James MacKerras Macdonnell: We have grown accustomed to orders in council, but is this a case where you did not even bother to have an order in council? Were these just minister's orders?


James Joseph McCann: It is stipulated in these other acts. For instance, the Animal Contagious Diseases Act specifically states that animals imported into this country must have a clearance from the authorities of the Department of Agriculture, which administers the act, before we are allowed to release them, even if the duty has been paid.


James MacKerras Macdonnell: But you
evidently feel that does not cover you because you are now passing this new legislation. I am just interested in knowing-and I think it is worth knowing as we pass

to what extent power is just taken in your stride, so to speak. We have often made complaints about orders in council but this seems to be a case where, as I said a moment ago, there was no authority of any kind, not even an order in council.


James Joseph McCann: There is a conflict of authority that we want to get away from. Our act as it stands says that goods shall be released immediately upon the payment of duty. Some of these other acts say that they shall be detained until there is a clearance from the particular department. In order to remove that conflict or repugnance, if you want to call it that, we are attempting to remove that difficulty by amending this section.


James MacKerras Macdonnell: I do not
imagine it is worth pursuing the matter very much further. I am interested to know why the minister speaks about a conflict of authority. I would not regard this as conflict
of authority. I would regard it as absence of authority, but I suppose we ought to be thankful that the minister is at last getting the power to do legally what he has been doing illegally.


[Stage Direction]
Section agreed to.
On section 3-Goods otherwise exempt, dutiable in certain cases.
Percy Ellis Wright: I should like to ask the minister a question with respect to this clause. It has to do with the collection of duty on goods brought into Canada for use by the armed forces or the government and their resale later. The effect of it is that, where a resale of goods is made to parties who are not entitled to import without paying duties, the duties shall be paid in full. Let us take a piece of equipment which is imported into this country and is used for two or three years. Is the duty payable on the depreciated value of the goods or on the cost value? I ask this question because I have been given to understand that a considerable amount of equipment was imported into Canada in this manner during the last war, and that when it came to pay the duty it was cheaper to ditch the equipment or throw it in a gully than to pay the duty, although there was still a lot of use in the equipment. Do the customs duties have to be paid on the original value or on the depreciated value of the equipment?


James Joseph McCann: The hon. member is entirely correct in his observation. When goods are brought in free or at a lower rate of duty, and then pass to other hands, the goods are dutiable in the hands of the new owner at the depreciated value at the time of the transfer.


[Stage Direction]
Section agreed to.
On section 4-Overpaid duties not returnable after six months.
Joseph-Alfred Dion: Shall the section carry?


James MacKerras Macdonnell: No.
Section stands.
Progress reported.



BUSINESS OF THE HOUSE

Alphonse Fournier: Mr. Speaker, tomorrow we will take up the estimates of the Department of National Defence. If we finish them, we will take up agriculture.


[Stage Direction]
At six o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Thursday, May 24, 1951